Answer to Quiz Week 8 Essay

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_____ budgeting is when budgets are formulated with the active participation of all affected employees A. Financial B. Team C. Participative D. Shared Question 3 Important factors considered by sales forecasters include all of the following except _____. A. past pattern of sales B. marketing research studies C. competitors' activities D. the desired level of sales Question 4 A major drawback of using historical results for judging current performance is that _____. A. past results may be incorrect B. results may refer to a different manager C. inefficiences may be concealed in the past performance D. all of these answers are correct Question 5 _____ is generally prepared as the first step in preparing the operating budgets. A. A sales budget B. An operating expense budget C. A purchases budget D. A budgeted income statement Question 6 Cheating may take the form of _____.: A. making short-run decisions to increase profits that are not in the company's best long-run interests B. creating budgetary slack C. decreasing profits when actual profits are significantly exceeding the profit target D. all of these answers are correct Question 7 An example of a favorable variance is _____. A. actual revenues are less than expected B. actual expenses are less than expected C. material prices are greater than expected D. expected labor costs are less than actual costs Question 8 Differences between the static budget and the flexible budget are due to _____. A. problems of cost control B. poor usage of material and labor C. a combination of price and material variances D. actual activity differing from expected activity levels Question 9 The type of budget that serves as the original benchmark for evaluating performance is called a _____ budget. A. balanced B. cost C. flexible D. static Question 10 Activity-level variances plus flexible-budget variances
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